A Senate panel wants the chief GSE regulator to explain why Fannie Mae and Freddie Mac executives continue to receive millions of dollars in bonus money for running the giant mortgage companies which continually need government assistance to stay afloat.
The GSEs have received $169 billion of Treasury assistance since being taken over in September 2008 and placed under the auspices of the Federal Housing Finance Agency.
“Earlier this week, it was reported that 10 executives at Fannie Mae and Freddie Mac were scheduled to receive bonuses totaling more than $12 million," Senate Banking Committee chairman Tim Johnson, D-S.D., said Thursday morning. "Given the current economic times and continued challenges in the housing market, I want to assure my colleagues that I plan to call acting FHFA director Ed DeMarco before the Committee as soon as possible." (A date for the hearing has not been scheduled yet.)
DeMarco was testifying before a House subcommittee when Sen. Johnson announced his plans to hold a hearing on the bonuses. One congressman asked him about the bonuses. The GSE regulator noted the same compensation plans have been in place since 2009 and that he has testified several times before Congress about the same issue.
"I will say that as a number of executives have turned over at the companies we seek at every instance to bring in new executives at lower compensation than their predecessors," DeMarco testified.
